In the course of conducting their business, associations regularly send out delinquency notices to owners who have not timely paid their assessments. It has been our experience that some delinquency notices still do not comply with Colorado law. On January 1, 2014, significant revisions were enacted to the Colorado Common Interest Ownership Act (“CCIOA”) with respect to collection policies, notices, and processes. If your association has a collection policy drafted prior to 2014 it is likely non-compliant and a new collection policy must be prepared for the association.
The updated CCIOA language required associations to adopt updated collection policies to include very specific information in one single letter. The requirements cannot be spread out among several notices. The other delinquency notices will likely contain the same or similar information but associations must provide one notice that contains all of the below information in order to comply with CCIOA:
- The total balance and a breakdown of same. The easiest way to fulfill this requirement is by attaching the full account ledger for the homeowner. Otherwise, associations must provide the dollar amount of the outstanding assessments, dollar amount of the interest charged, dollar amount of fines, dollar amount of late fees etc.
- Names of all record owners of the property and a date.
- Whether or not the owner can enter into a payment plan and instructions on how to set up the payment plan. The letter should not be ambiguous and state the owner may enter into a payment plan or is not entitled to enter into a payment plan.
- A specifically identified person and his/her contact information for setting up a payment plan, paying the debt, verifying the debt, asking questions, or requesting a ledger. This needs to be a specific person and not the main line at the management company.
- 30 day failure to cure provision. Below is an example of such a provision:
- Please note action is required by you to cure the delinquency. Failure to do so within 30 days of the date of this letter may result in your delinquency being turned over to an attorney, or collection agency, a lawsuit being filed against you, the filing of a foreclosure of a lien against your property, the appointment of a receiver, the acceleration of the assessment balance and/or any other remedies available pursuant to Colorado Law.
If any of the above information is missing the association will be required to send out a revised notice and lose time in its collection efforts.
Should you have any additional questions concerning collection notices, please do not hesitate to contact one of our attorneys at 303.432.9999.